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Analysis: Obama challenges GOP again, this time with budget

WASHINGTON (AP) With higher taxes on the wealthy and billions in new spending, President Barack Obama's no-balance budget lays down an audacious challenge to Republicans who swept to full control of Congress last fall and now claim a mandate to eliminate deficits over the next decade.

Make that the second audacious challenge in the past three weeks coming after a State of the Union address in which Obama threatened to veto Republican legislative priorities and demanded lawmakers enact his own.

Then, as now, his objective was in part to help Democrats in Congress recover from their election drubbing, and in part to position them and his party as the champion of the middle class in advance of the 2016 campaign. To do that, he tars Republicans as apostles of a "mindless austerity" that has set back the economic recovery and was woven into a recent history that includes a partial government shutdown and flirtation with default.

Policies adopted after Republicans took control of the House in 2011 "hurt, rather than helped, the economy," his budget says, although it fails to mention that Obama once negotiated seriously if unsuccessfully with Speaker John Boehner over billions of dollars in savings to Social Security and Medicare.

The word "austerity" appears seven times in a 17-page introduction, none of them favorable and usually attributed to Republicans and described as mindless or needless.

Now, Obama and budget say, those days are over.

To make the point, he called for about $1.5 trillion in tax hikes, mostly on wealthy corporations and individuals as well as smokers. Enacting new immigration policies like the ones approved in the Democratic-controlled Senate last year is estimated to raise another $500 million in higher tax revenue over a decade, as immigrants freed from the threat of deportation enter the workforce.

Spending is roughly flat: $50.3 trillion over a decade in the president's budget, compared with $50.4 the Office of Management and Budget calculates would otherwise be spent. Within those totals, though, Obama proposes hundreds of billions in cuts to Medicare providers on one side of the ledger, and nearly $500 billion in new highway and bridge construction, free community college for two years and other, smaller programs such as a National Park Service Centennial Initiative.

Further irritants to Republicans are embedded in the administration's tax-and-spending plan, including steps to fight climate change that they have ridiculed and the continued existence of the health care plan the GOP has vowed to uproot.

By Obama's reckoning, this all adds up to persistent deficits, estimated at $687 billion in 2025 despite what the administration predicts will be relatively strong economic growth and low unemployment.

Obama is at pains to say that's not so bad after much higher deficits in recent years. "The key test of fiscal sustainability is whether debt is stable or declining as a share of the economy," he says in his budget message. "The budget meets that test."

That may be fine for Obama and Democrats in Congress, but Republicans are betting their political election gains on a different test entirely.

"Our budget will balance, and it will help promote job creation and higher wages, not more government bureaucracy," House Speaker John Boehner said in a statement that also said the president wants to "impose new taxes and more spending without a responsible plan to honestly address the big challenges facing our country."

Republicans have passed a 10-year balanced budget through the House each year since they took power in 2011. The Senate, now under GOP control, intends to do the same thing, according Sen. Mike Enzi, R-Wyo., chairman of the budget panel. In a statement, he and Rep. Tom Price of Georgia, head of the House Budget Committee, said Obama is advocating more spending, more taxes and more debt.

"...That approach will yield less opportunity for the middle class and a crushing burden of debt that threatens both our future prosperity and our national security."

If they succeed in agreeing on a balance budget plan, House and Senate Republicans will be obliged to pass separate legislation to make it happen, deep spending cuts included.

Judging from his State of the Union speech and his budget, Obama will be waiting.

With a veto pen and a talk about the perils of austerity.

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Eds: David Espo is The Associated Press' chief congressional correspondent